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Logistics Activities
Setijadi
setijadi@SupplyChainIndonesia.com

2014

Components of Logistics Management


Management Actions

Inputs into
Logistics

Outputs of
Logistics

Planning Implementation Control

Natural
Resources

Competitive
Advantage

Human
Resources

Logistics Management
Suppliers

Finansial
Resources

Raw
materials

In-process
inventory

Finished
goods

Customers

Information
Resources

Logistics Activities
1. Customer Service

8. Parts & Service Support

2. Demand Forecasting

9. Plant & Warehouse Site Selection

3. Inventory Management
4. Logistics Communications
5. Materials Handling

Time & Place


Utility
Efficient
Movement to
Customer
Proprietary
Asset

10. Procurement
11. Reverse Logistics

6. Order Processing

12. Traffic & Transportation

7. Packaging

13. Warehousing &


Storage

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

1. Customer Service
Customer service represents the output
of the logistics system and the place component
of the firms marketing mix.
Five rights of a logistics system:
1.
2.
3.
4.
5.

Right product
Right place
Right condition
Right cost
Right time

The level of customer service determines not only whether


existing customers will remain customers
but also how many potential customers will become
customers.
Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

2. Demand Forecasting
Demand forecasting involves determining the amount of product
and accompanying service that customers will require at some
point in the future.
Forecasts of future demand determine promotional strategies,
allocation of the sales force, pricing, and market research
activities.
Logistics management forecasts
of demand determine how much
of each item produced by
the company must be transported
to the various markets
the firms serves.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

3. Inventory Management

Why hold inventory


1.
2.
3.
4.
5.

Economies of scale
Balancing supply and demand
Specialization
Protection from uncertainties
A buffer throughout the supply chain.

Inventory management involves


trading off the level

of inventory held to achieve


high customer service level.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

4. Logistics Communication
Effective communication must take place among:
1.
2.
3.
4.

The organization, its suppliers, and its customers.


The major functions within organization.
The 13 various logistics activities.
The various aspects
of each logistics activity.
5. Various members
of the supply chain.

Business
Information
Warehouse
...

R/3

Advanced
Planner &
Optimizer

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

Sales
Force
Automation

B2B
Procurement

5. Materials Handling
The objectives of materials handling are to:

1.
2.
3.
4.
5.

Eliminate handling wherever possible.


Minimize travel distance.
Minimize work-in-process.
Provide uniform flow free of bottlenecks.
Minimize losses from waste, breakage, spoilage, and
theft.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

6. Order Processing

A customers order triggers the logistics process and


directs the actions to be taken in satisfying order demand.
The components of order processing demand:
1.
2.
3.

Operational elements.
Communications elements.
Credit and collection elements.

Sumber: Stock & Lambert (2001)

7. Packaging
Packaging performs two basic functions: marketing and
logistics.
In a marketing sense, the package acts as a forms of
promotion or advertising.
In logistics, packaging serves a dual role:
The package protects the product
from damage while it is being
stored or transported.
Proper packaging can make it easier
to store and move products,
thereby reducing materials
handling costs.

Sumber: Stock & Lambert (2001)

8. Parts & Service Support


Logistics responsibility does not end when the product is
delivered to the customer.
Logistics must be concerned with many activities involved in
the repair and servicing of products.
This will require strategies and programs that are
coordinated with other reverse logistics activities.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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9. Plant & Warehouse Site Selection


The location of plants
and warehouses
(storage facilities) is extremely important.
The strategic placement of plants and warehouses can assist
firms in improving

customer
service level.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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10. Procurement
Procurement:
the process of acquiring materials and services to
ensure the operating effectiveness of firms
manufacturing and logistics processes.

The procurement function includes:


The selection of supply sources
locations.
Determination of the form
in which the material
is to be acquired.
Timing of purchases.
Price determination.
Quality control

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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11. Reverse Logistics


The handling of return goods is part of the larger
process referred to as reverse logistics.
In many industries in which customers return products for:

warranty repair,
replacement,
remanufacturing, or
recycling,

reverse logistics costs


are high relative to
forward logistics costs.

Plant

Distribution

Dealer

Plant

Distribution

Dealer

Plant

Distribution

Dealer

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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12. Traffic & Transportation


The traffic and transportation activity involves managing the

movement of products and includes:


Selecting the method of shipment,
Complyng with various transportation
regulations, and
Being aware of both
domestic and
international shipping
requirements.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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13. Warehousing & Storage


Products must be stored at the plant or in the field for
later sale and consumption unless customers need them the
instant they are produced.
Warehousing and storage activities involve the management
of the space needed to hold or maintain inventories.

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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The Global Logistics Environment

Political
& Legal

Economic

Customer
Service
Social
&
Cultural

Other
Activities

Ware-housing
& Storage

Inventory
Competition

Logistics
Executive

Packaging
Transportation

Geography

Technology

Sumber: Stock, J.R. & Lambert, D.M. (2001). Strategic Logistics Management 4th ed. Singapore. McGraw-Hill.

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